Unexpectedly strong earnings reports from heavyweights like Mattel and Johnson & Johnson streamed in on Tuesday, helping fuel a rally on Wall Street.
Corporate America has been largely expected to deliver gloomy results, with the sluggish global economy pinching profits.
But with the earnings season kicking into high gear this week, many companies are beating analysts’ relatively low expectations — and that’s enough for many investors.
Drug maker Johnson & Johnson’s adjusted earnings per share and revenues both came in better than expected as newer products boosted drug sales. It also slightly hiked its full-year profit forecast.
Sales of Monster High and Fisher-Price toys helped send Mattel’s earnings up 22% ahead of the key holiday shopping season, and its per-share profit topped analysts’ average forecast by about five cents.
Sales of Monster High dolls helped fuel profits at Mattel, which was among a stream of companies that posted unexpectedly strong quarterly results on Tuesday.
Its shares jumped 4% to $36.79.
Goldman Sachs also posted forecast-topping results as it brought in more fees for underwriting stock and bond options.
In midday trading, the Dow was up 121 points, or 0.9%, at 13,545. The S&P 500 and Nasdaq Composite were both up about 1%.
Still, profits are expected to drop for the first time in three years. Analysts are expecting third quarter earnings to fall 2.3% from a year ago, according to Thomson Reuters.
With News Wire Services
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